Bank Insurance

AAA

DEFINITION of 'Bank Insurance'

A guarantee by the Federal Deposit Insurance Corporation (FDIC) of deposits in a bank. Created in 1989, the Bank Insurance Fund is the federal fund used to insure bank deposits of national and state banks, that are members of the Federal Reserve System. Bank Insurance helps protect individuals who deposit their savings in banks, against commercial bank insolvency. Each depositor is insured to at least $250,000 per bank.

INVESTOPEDIA EXPLAINS 'Bank Insurance'

The FDIC, an independent U.S. government corporation, was initiated under the Glass-Steagall Act of 1933. Its purpose was to insure bank deposits against loss and to regulate banking practices. The collapse of a great majority of banks in the United States, during the Great Depression, prompted the creation of the FDIC.

RELATED TERMS
  1. Underinsurance

    Inadequate insurance coverage by the holder of a policy. In the ...
  2. Financial Institutions Reform, ...

    A law enacted to ensure that real estate appraisals are performed ...
  3. Niche Banks

    Banks that cater to and serve the needs of a certain demographic ...
  4. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  6. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
Related Articles
  1. Are Your Bank Deposits Insured?
    Savings

    Are Your Bank Deposits Insured?

  2. Are My Investments Insured Against Loss?
    Home & Auto

    Are My Investments Insured Against Loss?

  3. I know there is a form of deposit insurance ...
    Home & Auto

    I know there is a form of deposit insurance ...

  4. Bank Failure: Will Your Assets Be Protected?
    Options & Futures

    Bank Failure: Will Your Assets Be Protected?

Hot Definitions
  1. Return On Sales - ROS

    A ratio widely used to evaluate a company's operational efficiency. ROS is also known as a firm's "operating profit margin". ...
  2. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  3. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  4. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  5. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  6. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
Trading Center